Coke or Yahoo - which is the better buy?

From: Ira Krakow <ikrakow_1999@yahoo.com>
Subject: Coke or Yahoo - which is the better buy?
Date: Mon, 27 Dec 1999 20:37:17 -0500

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Another interesting thread on the Motley Fool was about investing in =
Coca Cola (KO-NYSE) or Yahoo (YHOO-NASDAQ).  We've discussed the through =
of investing in quality companies that are brand leaders in their =
market.  Certainly Coke and Yahoo qualify.

The problem I have is - what's the right price for these stocks?  Right =
now, Coke is trading at 60, with a P/E of 48.  Yahoo is at 415, with a =
P/E of 1610 (!).
I understand that it's going to be hard for Coke to double their market =
share, and that search engines (er, portals, or whatever they're calling =
them) is The Greatest Growth Opportunity Of The Millenium (this one or =
next, I'm not sure).

So, are both overpriced, both underpriced?  Do you believe the Efficient =
Market Theory, that the market is pricing each at their fair value?  If =
P/E isn't a valid metric, what is?

Ira


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